Problem
Superior Company provided the following account balances for the year ended December 31 (all raw materials are used in production as direct materials):
Selling expenses $ 218,000
Purchases of raw materials $ 268,000
Direct labor ?
Administrative expenses $ 155,000
Manufacturing overhead applied to work in process $ 334,000
Total actual manufacturing overhead costs $ 356,000
Inventory balances at the beginning and end of the year were as follows:
|
|
Beginning of Year
|
End of Year
|
|
Raw materials
|
$
|
55,000
|
|
$
|
34,000
|
|
|
Work in process
|
|
?
|
|
$
|
23,000
|
|
|
Finished goods
|
$
|
39,000
|
|
|
?
|
|
The total manufacturing costs for the year were $680,000; the cost of goods available for sale totaled $740,000; the unadjusted cost of goods sold totaled $668,000; and the net operating income was $35,000. The company's overapplied or underapplied overhead is closed entirely to Cost of Goods Sold.
(Hint: Prepare the income statement and schedule of cost of goods sold first followed by the schedule of cost of goods manufactured.)
Required:
a. Prepare a schedule of cost of goods manufactured.
b. Prepare a schedule of cost of goods sold.
c. Prepare an income statement for the year.